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New OrveEans, May 28, 1894. 
Lo the flonorable Members of the General Assembly of Louts- 


tana: 

GENTLEMEN—On May 22, 1882, Mr. Paul Tulane made a 
donation of real estate in the city of New Orleans valued at 
$362,900 to certain citizens there for the higher education of 
young white persons. In his letter of donation to the admin- 
istrators of the fund appointed by him he used the following 
language: 

The fact that property donated for educational purposes is at 


this time liable to taxation in the State of Louisiana has occasioned 
me much embarrassment, as I should like to feel that the citizens 


of that State, who are to be the beneficiaries of this donation, 


should enjoy its advantages to the full measure of the value of 
the property donated. There are other States whose laws do 
not, by taxation, repel such gifts in aid of education, whose 
wise example, I am assured, will be followed by the State of 


‘Louisiana and the city of New Orleans in this instance; and I 


earnestly urge that you make immediate effort to secure the 
exemption of this property from taxation, and be constant in so 
doing until your efforts are successful. 

The character of the property donated is to remain un- 
changed. It can not be mortgaged, and it can not be sold nor 
encumbered in any way, except at the end of not less than fifty 
years, as hereinafter stated. Mortgaging it or selling it, and the 
investment of the proceeds in stocks, bonds or other securities, 
might and probably would lead to disaster, owing to the uncer- 
tain and fluctuating nature of‘the value of securities of every 
description. On the other hand, the real estate, the title to 
which I intend to donate to you, is well located, and can not 
fail to increase in value as the city shall become prosperous. 
You must keep the property well-insured in solvent offices and 
in good repair, so that the best rental possible may be realized. 


Subsequently Mr. Tulane increased his donation to about 


one million dollars, nearly all in stocks and bonds. 


in response to this suggestion the General Assembly passed 
Act No. 43, approved July 5, 1884, by which it made a con- 
tract with the administrators of the Tulane Educational Fund 
to devote all the revenues of that fund to the expansion and de- 


velopment of the University of Louisiana, and to build up a 


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great university in New Orleans. In consideration thereof and 
of alarge number of free scholarships, and of the release of 


the State from a constitutional provision to grant an annuity of 


$10,000 to the University of J.ouisiana, said Act No. 43 was 
passed and submitted to the people for ratification in a consti- 
tutional amendment. It is well known to you that this amend- 


ment was adopted by an overwhelming majority. But before — 


this ratification the question of the exemption from taxation of 
Tulane University, in virtue of the legislative Act No. 43, came 
before the Supreme Court of Louisiana, the decision of which 
was delivered by Chief Justice Manning. This opinion is now 
submitted to you, as it presents in authoritative and judicial 
form from the highest tribunal of justice in this State not only 
the law in this matter, but the principles that govern it. Legis- 
lators will see that they are dealing with a State institution, 
which is entitled to their generous consideration, and will re- 
buke the blind jealousy which seeks to ignore that fact and to 
enlist prejudices against a useful institution that is doing its full 
duty to the State and to the people. 


Very respectfully, 
Your obedient servant, i 
Wo. PRESTON JOHNSTON. 
President of the University. 


~ 


\ 


SUPREME COURT OF THE STATE OF LOUISIANA. 


ADMINISTRATORS OF THE TULANE 
CATIONAL FUND 
Epuca (No. 9716. 
5 US. 
Tue Boarp oF ASSESSORS ET ALS. § 


Appeal from the Civil District Court, Parish of Orleans. 
CLERK’S OFFICE, New Orleans, April 5, 1886. 


Mr. Justice Manning delivered the opinion and decree of 
the court in the words and figures following, to-wit: 


The Board otf Assessors of New Orleans placed upon the tax 
roll for 1885 the property given by Paul Tulane to the plain- 
tiffs to promote the education of the white youth of that city. 
The object of the present suit is to annul that assessment on the 
ground that the property is exempt from taxation. | 


The same property was assessed in 1883 and the plaintiffs 
then claimed the exemption of it from taxation and we held the 
claim not good. State ex rel. Board of Assessors Tulane Edu- 
cational Fund vs. Board of Assessors, 35 An. 668. 

Since that decision was rendered the General Assembly have 
passed an elaborate act the evident purpose of which is to ef- 
fect an exemption of the plaintiff ’s property from taxation, and 
our construction of that act will determine the question 
whether the machinery adopted has accomplished the intended 
purpose. 

It is scarcely necessary to say that the General Assembly can 
not exempt property from taxation by its own will. Unless the 
expression of that will is in accord with the Constitution, it 
. can accomplish nothing. 

There has been for many years an educational institution in 
New Orleans called the ‘‘ University of Louisiana.’? It was 
founded by the State and has been fostered by it. For some 
time only two colleges were in operation in it, those of law and 
medicine. Later a college for the humanities has been added 
under the humble name of an academical department. Succes- 
sive constitutions of the State have repeated the injunction to 


4. 


the Legislature to maintain it. The last Constitution has em- . 


phasised this command and made it imperative. The General 


Assembly shall from time to time make such provisions for the 


proper government, maintenance and support of the University 
of Louisiana as the public necessity and well-being of the peo- 
ple may require. Const. 1879, Art. 230. The pecuniary aid 
was limited to ten thousand dollars a year, and every Legisla- 
ture since has appropriated the full sum, and we have held that 


these appropriations have the character and rank of constitu- 


tional appropriations. State ex rel. Ad. Univ. vs. Burke, 35 

An. 457. : 
The act of the General Assembly of 1884 begins its title with 

the expression that the fostering, maintaining and developing 


the University of Louisiana is one of its objects, and its pream- — 


ble recites that the administrators of the Tulane Fund are 
willing and desirous to take charge of that institution and to 
devote all the revenues they now have, or may ever have, to its 


expansion and development. It then enacts that the Tulane ~ 
Administrators shall hereafter have full control and the exclusive 
government of the University of Louisiana, and shall have all 


the powers, privileges, franchises and immunities that are now 


vested in the trustees of the University, and also all its property; 


and in order to enable the State to realize the full benefit of the 
intention of the Tulane Administrators to devote all their reve- 
nues to the public purpose of maintaining the university, the 
act declares that a contract is thereby made, by and under which 
the Tulane Administrators are irrevocably vested with all the 


franchises, privileges and immunities theretofore granted them, » 


and in consideration therefor they bind themselves also irrevoca- 


bly to devote all their revenues to the public purpose already © 


stated. And then in recognition of the beneficence of Mr. 
Tulane and of the fact that the administrators of the fund cre- 
ated by that beneficence were hereafter to devote it exclusively 
to fostering and developing this institution of the State, the 
name of the benefactor was directed to be hereafter prefixed to 
its ancient name, so that the future designation of it shall be 
the Tulane University of Louisiana (Acts 1884, pp. 48 e¢ seg.). 

Our learned brother of the lower court construed the act as 


being a charter of a new university, to which was transferred — 


mo 


5 


all the property and privileges of the University of Louisiana. 
It that be so, the University of Louisiana is abolished, for if all 
its privileges are transferred to another institution, and all the 


property it had to make those privileges effective and useful to 


the public is likewise transferred, there will be nothing left but 
the name. We can not attribute to the Legislature the inten- 
tion to denude of its powers and privileges an institution which 
the Constitution has commanded them to maintain, and thus to 
make of it a simulacrum without vitality or power. Nor can 
we attribute to the Legislature a purpose to evade the constitu- 
tional recognition of the existence of the university. Obviously 
the Legislature can not abolish the university. It has its root 
in the fundamental law and that law has ordered the Legisla- 
ture to foster and develop it. But if without assuming to 
destroy, the Legislature desiccates it by removing the fecundat- 
ing sources of its strength and growth, it does practically 
destroy it. 

No doubt the Legislature had in mind the creation of a new 
university as a consequence or result of the constitutional 


- amendment that it has directed to be submitted to a popular 


vote, for among the objects of this act of 1884, expressed in its 
title, is— 

‘* To give said Board of Administrators of the Tulane Edu- 
cation Fund, upon the adoption of said constitutional amend- 
ment, not only the full powers of administration over the 
University of Louisiana, conferred by this act, but also the 
power to create, develop and maintain a great university in the 
city of New Orleans, which university so to be created shall 
perpetually be under their full and complete control.”’ 

But the Legislature, so far from attempting to abolish the 
university, by its own act-expressly includes its maintenance in 
the objects of its legislation and remitted to a constitutional 
amendment the derivation of authority to replace the former 
university by a new creation. 

The legislative purpose to preserve the University of Louis- 
lana is unequivocally and constantly manifested in every part 
of the act of 1884. The title mentions it, the preamble gives 
prominence to it and the enacting clauses confirm it. The 
university is delivered to the Tulane Administrators with all its 


6 


franchises, immunities and property to be governed and de- 


veloped by them. Its existence is continued, and if it is not 
perpetuated, the constitutional amendment alone will confer 
the power to replace it by another. 

But the real question lies behind this, and it is whether the 


dedication by the Tulane Administrators of all the revenue to — 


the support and maintenance of the University of Louisiana is 
such dedication to public use as will exempt the property from 
taxation proprio vigore. : 

It is thus apparent that the question presented in this case is 
wholly different from that considered and decided in the former 
one—the question then being whether the property of the Board 
was taxable, its income being devoted to education, and we 
held that it was private or corporate income. 


The first exemption from taxation by the Constitution is ‘‘ all 
public property ’?’ (Art. 207). The University of Louisiana is 
not only a public institution, but the Constitution has taken it 
under its protecting care. The entire revenues of the Tulane 
Administrators are dedicated to its support. The State has 
contracted with them to deliver this public institution into their 
hands, on the condition that their revenues shall be wholly ap- 
plied to its maintenance and development, and they have accepted 
the contract and thereby made the University the usufructuary 


of all their property. Whatever taxes are payable upon this prop- 
erty must necessarily be paid out of these revenues that have 
been thus dedicated to a public use—that is to say, must be paid- 


by the University. 

Whatever diminution of these revenues is made by the pay- 
ment of taxes is a diminution fro ¢anto of revenues that have 
been consecrated to public use, and it is admitted that taxes for 
1885. and 1886 exceed the sum that the State has annually ap- 


proprieted to the University. So that if taxes are collected 


from the Tulane Fund and the State continues its appropria- 
tion, she will receive money only to pay it back. But the 
plaintiffs have refused to receive this annual donation from the 
State since the passage of the act of 1884, and they have ex- 


pressly waived all right to it and all right to any future appro-. 
priation, and this waiver is stated in the act to be an additional 


consideration, supporting the contract made therein. Sec. 6. 


Pe 
ee 


7 


The plaintiffs have complied with their part of that contract. 
From August 1, 1884, when they took charge of the University 
to the close of 1885, they have expended near a hundred 
thousand dollars (exact figures $98,259.50) upon it, including 
the cost of insurance and repairs of the buildings, and these 
were the property of the University before it was turned over 
to them. Their revenues have conserved its property, paid its 
current expenses and have begun to develop a_ languishing 
and resourceless institution into vigorous and healthy life. 


The usufructuary is bound to pay all the taxes on the property 
that is subject to the usufruct (Rev. C. C., Art. 578); and as 
the University of Louisiana is the usufructuary of the Tulane 
property, it follows. necessarily that whatever taxes are 
paid will be paid by the University. The only reduction or 
diminution of the revenues of the University possible under the 
contract of plaintiffs with the State is the diminution that would 


be wrought by the sanction of the State’s demand for taxes. Now 


the University can not be taxed. The Constitution created it. 
Its property is public property within the intendment of the 
Constitution. | 

But the property of the Tulane Board is not the property of 
the University, and it is the property of the Tulane Board of 
which taxes are demanded. 

The title of property does not invariably fix the person who 
is obliged for the taxes upon it. As we have just stated, the 
usufructuary and not the titular owner pays on property held in 
usufruct. Familiar illustrations of the rule are found in those 
instances where private property is taken for a public road, or 
a dedication of a lot of ground is made on condition that a 
court house is built on it. The ownership remains where it 
was, but the owner pays no taxes. 

And those illustrate another legal proposition, viz.: that pri- 
vate property which is subject to taxation becomes exempt by 
the change that is made in its use. ‘The character of taxability 
is not ineffaceably stamped on property, and it may be removed 
by the act of its owner. Whenever he dedicates it to public 
use it passes under the dominion of the exemption that is ac- 
corded to public property. And that is what we meant when 
in the earlier part of this opinion we said that the question was 


8 


whether the consecration of the plaintiff’s revenues to a public — 
use did not proprio vigore operate an exemption. The Legis- 
lature can not exempt from taxation property that is constitu- 
tionally liable to it, but an owner of property may translate it 
into the domain of constitutional exemption by dedicating it to 
a public use. 

And primarily the TL poidlenire determines what is a Sabite 
use, and when it has declared what may be so regarded courts 
will not interfere, except in clear cases of usurpation or abuse of 
authority (Inhab. of Wayland vs. Co. Com. Middlesex, 4 Gray 
501). The act of 1884 declares that the plaintiffs revenues are 
devoted to public use, and, as a legal consequence, the property 
that produces them is exempt from taxation unless we are pre- 
pared to say that the legislative discretion has been unlawfully 
or evasively exercised, for that is said to be ae criterion by 
which a court is to test it. | 

SaysCooley: ‘‘ Taxes should only be levied for those purposes 


which properly constitute a public burden. But what is for the - i 


public good and what are public purposes, and what does con- 


stitute a public burden, are questions which the Legislature 


must decide upon its own judgment, and in respect to which it 
is vested with a large discretion which can not be controlled by — 
the courts, except, perhaps, where its action is clearly evasive, 
and when under pretence of a lawful authority it has assumed 
to exercise one that is unlawful.’’ Const. Lim., p. 157. 

We do not announce a new legal principle when we hold that 
property dedicated to a public use, the revenues of which serve © 


a public purpose, is public property, although the title be notin 


the public. When a judgment creditor of the Charity Hospital 


levied on its property we maintained an injunction of its sale, e 


saying: 

‘¢Tt may not be that the title to the property from which their 
revenues may in whole or in part be derived is literally in the 
State; but nevertheless the State owns them, or holds them in 
trust, though it be for the benefit of those they were established 
to serve. | ; 

‘Tf, then, this hospital is a State institution, maintained and 
administered as we have seen by State authority, it is the first 
duty of the State to secure and preserve to it the essential con- 


Sorte 


9 


dition of its existence for the purpose for which it was estab- 
lished. 

‘¢ Tt is utterly inconsistent with this duty and the protection 
that the State owes to this institution to suffer it from any cause, 
or at the instance of creditors or other persons, to be deprived 
of its property, without which its work of beneficence and 
charity can not be accomplished.’’ State vs. Finley, 33 An. 
114. 

If it is the first duty of the State to prevent others despoiling 
the property of an institution under its protection, much more 
is it its duty to abstain from despoiling that property itself. The 
sale of the property ot the Charity Hospital at the instance of 
its creditor would have despoiled it of a part of its revenue, 
and the sanction of the State’s demand for taxes of the Tulane 
property will have a like effect upon the revenues of the uni- 
versity. As we did not allow the one, neither can we the other, 
and the plaintiffs are entitled, therefore, to a judgment decree- 
ing the exemption of their property from taxation. 

We felicitate ourselves that the way to this consummation has 
been timely cut by the Legislature, so that the stream of Paul 
Tulane’s bounty shall flow on undiminished, while the children 
of our State through successive generations shall ‘‘rise and call _ 
hira blessed.’’ 

It is therefore ordered and decreed that the judgment of the 
lower court is avoided and reversed, and that plaintiffs now 
have judgment against the defendants annulling the assessment 
of the property donated them by Paul Tulane and decreeing 
.the same exempt from taxation. It is further decreed that the 
plaintiffs recover their costs in both courts. 

Justice Fenner recused himself, being one of the adminis- 
trators. 

A true copy: 
[Signed] JoHn AUGUSTIN, 

Deputy Clerk. 


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